March 22, 2019

Minnesota Legislative Update: Slow Progress for Employment Laws

A number of proposals impacting employers and employees have been winding their way through the committee process over the last month. These include Paid Family and Medical Leave (HF5), Paid Sick and Safe Time (HF11), Wage Theft (HF6 / SF1816), Sexual Harassment Provisions (HF10 / SF2295) and Employment Mandates (SF2321). While these proposals have been moving swiftly through the House, they appear to be stalling in the Senate, and it seems unlikely that they will pass through all relevant committees and meet next Friday’s second committee deadline. Given the importance of these proposals to the House majority, there is speculation that some of these proposals will reappear as budget bills early next month. We take a look at these proposals below.

Paid Family and Medical Leave

A top priority for House DFLers this session, HF5, authored by Rep. Laurie Halverson (DFL-Eagan), would create a family and medical benefit insurance program administered by the Minnesota Department of Employment and Economic Development that would partially reimburse the wages lost when workers take leave to address family or medical issues. Modeled after Minnesota’s unemployment insurance program, this program would mandate 12 weeks of medical leave with partial wage replacement and/or 12 weeks of family leave for maternity, paternity, bonding and caregiving purposes. Employers would be charged a yearly premium based on employee wages with the ability to charge an employee up to 50 percent of the premium amount. Employers may apply to substitute a private plan is that plan provides the same rights, protections, and benefits as the state plan.

This bill has its fourth committee hearing Tuesday, March 26, in the Jobs and Economic Development Finance Division. Although HF 5l is speeding through the House, the Senate companion has not yet had a hearing. SF1060, authored by Sen. Susan Kent (DFL-Woodbury), has been referred to the Jobs and Economic Growth Finance and Policy Committee.

Earned Sick and Safe Time

HF11, authored by Rep. John Lesch (DFL-St. Paul) requires employers to allow employees to earn a minimum of one hour paid earned sick and safe (ESS) time for every 30 hours worked. “Employee” is defined as anyone who has worked at least 80 hours in a year for an employer. Accrual begins when a qualified employee begins employment, but an employee may not begin using ESS time until they have worked for the employer for 90 days. Salaried employees, who are exempt from the provisions of federal overtime laws, are deemed to work 40 hours of work for purposes of ESS accrual. Employees could accrue up to 48 hours per year and carry over at least 80 hours of ESS from year to year.

Employees may use ESS for the following:

  • the employee’s illness or preventative care.
  • care of a sick family member or family member in need of preventative care.
  • absence related to domestic abuse, sexual assault or stalking of the employee or family member.
  • closure of the employee’s workplace due to weather or public emergency, or closure of a family member’s school or care facility due to weather or public emergency.
  • a determination by a health care provider that the employee or family member is at risk of infecting others with a communicable disease.

Employers are prohibited from retaliating against an employee for taking ESS time and are required to reinstate employees to the same or comparable position upon their return.

After three previous committee stops HF 11 is currently scheduled for a hearing Tuesday, March 26, in the Jobs and Economic Development Finance Committee.

Much like Paid Family and Medical Leave, the Paid Sick and Safe Time debate has been limited to the lower body. Sen. Sandy Pappas (DFL-St. Paul) is the author of the Senate companion, SF1597. SF 1597 has been referred to the Senate Jobs and Economic Growth Finance and Policy Committee, where it has not been given a hearing and is not expected to meet committee deadline.

Sexual Harassment Legal Standard

For a second year, the Legislature is wrestling with whether to change the long standing “severe and pervasive” legal standard for sexual harassment claims in Minnesota. The current definition of “sexual harassment” in the Minnesota Human Rights Act (MHRA) provides that one of the ways sexual harassment discrimination can occur is when unwanted sexual advances, conduct or communication creates an intimidating or hostile environment substantially interfering with an individual’s employment, education, housing or access to public accommodation or public service. In interpreting this provision of the MHRA, Minnesota courts have adopted the federal standard used to interpret certain federal discrimination claims that require the discriminatory harassment to be sufficiently severe and pervasive to be actionable.

The House’s approach, contained in HF10 and authored by Rep. Kelly Moller (DFL-Shoreview), amends the MHRA to clarify that the harassing conduct or communication does not need to be severe or pervasive in order to be discriminatory sexual harassment. Proponents of HF 10 have argued that the severe and pervasive standard is a high bar resulting in many instances of sexual harassment being summarily dismissed. Opponents, primarily in the business community and the defense bar, say that the language of HF 10 is too subjective and vague, resulting in a significant increase in litigation.

HF 10 unanimously passed the House Judiciary Finance and Civil Law Division. On March 21 it passed the House floor 113-10.

SF1307, HF 10’s Senate companion, authored by Sen. Kari Dziedzic (DFL-Minneapolis), has not received a Senate hearing. Instead, the Senate’s approach is contained in SF2295. Authored by Sen. Karin Housley (R-Stillwater), SF2295 seeks to reject problematic federal case law, instead reaffirming that legally actionable sexual harassment in Minnesota must be both objectively and subjectively harassing, and that the “severe or pervasive” standard may be met with one significant instance of harassing conduct or communication or a series of harassing conduct. This bill also provides protections to employers where they exercise reasonable care to prevent or promptly correct sexual harassment or where the employee unreasonably fails to take advantage of preventative or corrective opportunities provided by the employer.

The Minnesota Department of Human Rights testified that the Administration supports the House language and not the language found in Sen. Housley’s bill. SF 2295 passed the Senate Judiciary and Public Safety Finance and Policy Committee and has been referred to the General Register on the Senate Floor.

Wage Theft

The House and the Senate are also taking separate approaches to address wage theft. Wage theft takes many forms, such as paying below minimum wage, not paying overtime, making unlawful payroll deductions or just not paying wages at all. The Minnesota Department of Labor and Industry estimates that approximately 39,000 Minnesota workers suffer some form of wage theft annually, resulting in nearly $12 million in unpaid wages.

The House approach would increase penalties on employers who engage in wage theft, give the Minnesota Department of Labor and Industry the power to issue subpoenas and create a gross misdemeanor if the wage theft is significant. This approach, HF6, authored by Rep. Tim Mahoney (DFL-St. Paul) was heard in the Labor Committee and Judiciary Finance and Civil Law Committee prior to the first committee deadline. Currently HF6 is in the Jobs and Economic Development Finance Committee with a hearing scheduled for Tuesday, March 26. SF 1933, the Senate companion, has not had a Senate hearing and is not expected to make committee deadline.

The Senate’s approach, SF1816, authored by Sen. Eric Pratt (R–Prior Lake), is pushing his own wage theft requiring a written notice from an employee to their employer stating concerns, it would also require a 10-day waiting period before the Minnesota Department of Labor and Industry could start an investigation. Senator Pratt said this waiting period would provide time for inadvertent mistakes to be corrected. The Department of Labor and Industry has expressed concerns that the written notice from employees could lead to retaliation and that the 10-day waiting period would allow time for bad employers to coerce employees and cover up allegations.

SF1816 is currently sitting in the Finance Committee after being heard in the Jobs and Economic Growth Finance and Policy Committee and the Judiciary and Public Safety Finance and Policy Committee prior to the first deadline. It does not have a companion in the House.

Preemption

For several years, state business groups have sought legislation preempting local jurisdictions from adopting their own minimum wages and other worker benefits. These ordinances, they’ve argued, have created a patchwork of complex, conflicting and confusing local regulations making it difficult for businesses that do work in multiple jurisdictions. This year’s version, SF2321, authored by Sen. Mark Koran (R-North Branch), prohibits local governments from adopting or enforcing any ordinances requiring employers to pay higher than the state’s minimum wage rate, requiring paid or unpaid leave, regulating the hours or scheduling of work time that an employer provides an employee, or requiring an employer to provide an employee a particular benefit or term of employment. SF2321 exempts any ordinance adopted before this year, which would include the paid sick and safe time ordinances in Minneapolis, St. Paul and Duluth – and Minneapolis’ and St. Paul’s minimum wage ordinances.

SF2321 was heard last week in the Senate Local Government Committee where it was supported by most business and trade groups and opposed by labor groups and associations representing local governments. The latter groups generally do not like proposals preventing local officials from exercising authority and making their own decisions. SF 2321 passed the Local Government Committee on a party line vote and referred to the State Government Finance committee where a hearing has not yet been scheduled. SF 2321 has no House companion.

Important Dates

  • March 29, 2019 – Second Legislative Committee Deadline
  • April 12, 2019 – Third Legislative Committee Deadline
  • May 1, 2019 – All Finance Bills Passed Off House/Senate Floor
  • May 6, 2019 – Fiscal Targets Agreed to and Provided to Finance Bill Conference Committees
  • May 13, 2019 – Conference Committee Reports Due to Original Body
  • May 20, 2019 – Last Day of the Legislative Session

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